Austrian energy group OMV sees hope for a recovery in oil prices in thesecond half of 2020 helped by increased fuel demand and output cuts by producers such as Saudi Arabia, its chief executive said.
The spread of the coronavirus has knocked global demand and weighed on crude prices and oil companies’ profits.
But the willingness of producers such as Saudi Arabia and Norway to drastically cut output shows oil prices have a chance to return to a reasonable level, OMV CEO Rainer Seele said.
OMV is curbing its oil production in the United Arab Emirates and in Norway to meet agreed quotas but it does not expect any production shutdowns, Seele said.
“I also do not see any major production interruptions in our refinery business.”
OMV benefited from the fact that it has transferred its European refineries from predominantly fuel refineries to jet fuel and petchem units, allowing it to shift production from low-demand kerosene to sought-after plastics.
Chief executive of Austrian energy group OMV Rainer Seele gestures during an interview with Reuters in Vienna, Austria, on May 12, 2020. (Reuters)
To cover its energy consumption, OMV would rely to a large extent on renewable sources in the future.
“But we won’t build up (renewable energy) as a business unit, instead we will move towards high value chemical products and recycling.”
Seele said he plans to decide on the sale of OMV’s nearly 300 German filling stations by year-end after more than 20 parties expressed interest.
A decision on its pre-coronavirus crisis proposed 2019 dividend of 2.00 euros per share will be made in the second half of the year.
“Once we have seen the second quarter and have an idea regarding the third quarter, then the management board will meet again and discuss.”